Greece passes bailout deal as riots rage in Athens

Feb. 12, 2012 10:52 PMAssociated Press

ATHENS, Greece - Greek lawmakers today approved harsh new austerity measures demanded by bailout creditors to save the debt-crippled nation from bankruptcy, after riots in Athens and other cities left stores looted and burned and more than 120 people hurt.

The historic vote paves the way for Greece's European partners and the International Monetary Fund to release $170billion (130billion euros) in new rescue loans, without which Greece would default on its mountain of debt next month and likely leave the eurozone -- a scenario that would further roil global markets.

Lawmakers voted 199-74 in favor of the cutbacks, despite strong dissent among the two main coalition members. A total of 37 lawmakers from the majority Socialists and conservative New Democracy party either voted against the party line, abstained or voted present.

Sunday's clashes erupted after more than 100,000 protesters marched to the Parliament building to rally against the drastic cuts, which will ax one in five civil-service jobs and slash the minimum wage by more than a fifth.

At least 45 businesses were damaged by fire, including several historic buildings, movie theaters, banks and a cafeteria, in the worst riot damage in Athens in years. Fifty police officers were injured and at least 55 protesters were hospitalized. Sixty-seven suspected rioters were arrested and a further 70 detained.

As the vote got under way early today, Prime Minister Lucas Papademos urged calm, pointing to the country's dire financial straits. "Vandalism and destruction have no place in a democracy and will not be tolerated," Papademos told Parliament. "I call on the public to show calm. At these crucial times, we do not have the luxury of this type of protest. I think everyone is aware of how serious the situation is."

Since May 2010, Greece has survived on a $145billion (110billion euros) bailout from its European partners and the International Monetary Fund. When that proved insufficient, the new rescue package was approved. The deal, which has not yet been finalized, will be combined with a massive bond swap deal to write off half the country's privately held debt.

But for both deals to materialize, Greece had to persuade its deeply skeptical creditors that it has the will to implement spending cuts and public-sector reforms that will end years of fiscal profligacy and tame gaping budget deficits.

As protests raged Sunday, demonstrators set bonfires in front of Parliament and dozens of riot police formed lines to keep them from making a run on the building. Security forces fired dozens of tear-gas volleys at rioters, who attacked them with firebombs and chunks of marble broken off the fronts of luxury hotels, banks and department stores.

Clouds of tear gas drifted across the square, and many in the crowd wore gas masks or had their faces covered, while others carried Greek flags and banners. Masked rioters also attacked a police station with petrol bombs and stones.

A three-story building was consumed by flames as firefighters struggled to douse the blaze. Streets were strewn with stones, smashed glass and burnt wreckage, while terrified passers-by sought refuge in hotel lounges and cafeterias.

"I've had it! I can't take it anymore. There's no point in living in this country anymore," said a distraught shop owner walking through his smashed and looted optician store.

Conservative New Democracy leader Antonis Samaras said the rioting "hurts the entire country."

"We are seeing scenes from a future that we must do our utmost to avert," he said.

Papademos' government -- an unlikely coalition of the majority Socialists and their main foes, New Democracy -- had been expected to carry the austerity vote. Combined, they control 236 of Parliament's 300 seats.

Still, they faced strong dissent: Besides the 37 lawmakers who voted against the bill or abstained, a further six voted against sections of the proposed measures. After the vote, the coalition government announced those 43 lawmakers had been expelled.

Finance Minister Evangelos Venizelos said the measures were vital to the country's very economic survival.

"The question is not whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions," he told lawmakers before the vote. "When you have to choose between bad and worse, you will pick what is bad to avoid what is worse."